Q4 Recap

Cooler Pre-Christmas Period Helps Apparel Sales in the East

The eastern half of the U.S. experienced much more seasonable temperatures during November and December of 2016. This was a welcomed change for many retailers looking to move cold weather merchandise during the key holiday shopping period.

Clothing stores in markets east of the Mississippi River – which Planalytics estimates received a $576 million dollar weather-based sales bump versus last November and December – were big beneficiaries.

The locations listed under “Cooler Markets” illustrate how the consistently cooler temperatures in eastern cities helped fuel strong performance over soft comps from 2015. In these eastern cities, weather-driven demand (a measure of how much the weather alone affects consumer demand) was favorable across many seasonal categories. For these cities, apparel categories like Boots, Outerwear, and Fleece typically saw +5 to +20% weather-based demand lifts compared to the prior year.

In these East Coast markets, non-apparel also received an assist from Mother Nature during November and December. Examples include: Soup +3% in the Northeast, Heaters +50% in the Southeast, and Electric Blankets +12% in the Eastern North Central region (all vs. last year).

Out West, the weather variance to the prior year was generally warmer and less helpful for winter season merchandise sales. From Texas up through much of the Rockies and into California (see locations listed under “Warmer Markets”), many markets experienced a less favorable “weather comp”, dampening sales compared to 2015. In the Southwest, for example, the warmer weather reduced apparel store transactions by 1.3% in November and December compared to last year.

January Brings Warmer Temperatures and More Rainy Days

Overall, January 2017 saw warmer temperatures than the previous year. These conditions benefited restaurants as fewer consumers were hampered by snow and ice, resulting in a positive weather impact of $687 million (compared to January 2016). While the warmer temperatures brought less wintry precipitation and helped overall commerce, there were more instances of rain. Nationally, the month closed with 16% more precipitation days than last year. The frequency of precipitation events increased 27% over last year for the heavily populated Northeast. Nationally, the Rainwear category saw a 10% year-on-year boost due to the weather. Meanwhile, the winter clothing categories (coats, hats, gloves, etc.) that had performed strongly pre-Christmas were generally down 5-10% for the month due to the less favorable weather. The Snow Removal category was down 17%.

Q4 Summary

For retail Q4 overall, the favorable pre-Christmasconditions drove a net positive for clothing chains, even as demand slowed in January. Other retailers with a heavy winter softlines focus (sporting good stores and some department stores) also benefited from the weather throughout the quarter.

On the other hand, hardware stores and home centers struggled to match strong comps which were fueled by abnormally warm weather in November and December 2015. The rainier conditions in January also had a negative affect on the sector.

Overall, weather’s impact on restaurants for the quarter was nearly flat. Traffic was hurt by cooler temperatures in December, but bounced back in January.